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Docket: 2003-511(IT)G
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BETWEEN: |
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WILLIAM SHAWN DAVITT, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
____________________________________________________________________
Appeal heard on November 18 and 19, 2003 at Toronto, Ontario
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Before: The Honourable Justice L.M. Little |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Jocelyn Espejo Clarke |
____________________________________________________________________
ORDER
The appeal from the assessment made under the Income Tax Act for the 2000 taxation year is quashed, with costs, in accordance with the attached Reasons for Order.
Signed at Vancouver, British Columbia, this 9th day of February 2004.
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"L.M. Little" |
Little J.
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Docket: 2003-283(CPP)
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BETWEEN: |
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WILLIAM SHAWN DAVITT, |
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Appellant, |
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and |
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THE MINISTER OF NATIONAL REVENUE, |
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Respondent. |
____________________________________________________________________
Appeal heard on November 18 and 19, 2003 at Toronto, Ontario
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Before: The Honourable Justice L.M. Little |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Jocelyn Espejo Clarke |
____________________________________________________________________
ORDER
The appeal from the assessment made under the Canada Pension Plan for the 2001 year is quashed, with costs, in accordance with the attached Reasons for Order.
Signed at Vancouver, British Columbia, this 9th day of February 2004.
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"L.M. Little" |
Little J.
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Docket: 2003-284(EI)
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BETWEEN: |
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WILLIAM SHAWN DAVITT, |
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Appellant, |
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and |
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THE MINISTER OF NATIONAL REVENUE, |
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Respondent. |
____________________________________________________________________
Appeal heard on November 18 and 19, 2003 at Toronto, Ontario
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Before: The Honourable Justice L.M. Little |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Jocelyn Espejo Clarke |
____________________________________________________________________
ORDER
The appeal from the assessment made under the Employment Insurance Act for the 2001 year is quashed, with costs, in accordance with the attached Reasons for Order.
Signed at Vancouver, British Columbia, this 9th day of February 2004.
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"L.M. Little" |
Little J.
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Citation: 2004TCC133 |
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Date: 20040209 |
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Docket: 2003-511(IT)G 2003-283(CPP) 2003-284(EI) |
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BETWEEN: |
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WILLIAM SHAWN DAVITT, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, THE MINISTER OF NATIONAL REVENUE, |
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Respondent. |
REASONS FOR ORDER
Little J.
A. FACTS:
[1] The Appellant filed a Notice of Appeal with respect to the Notice of Assessment issued pursuant to the Income Tax Act (the "Act") for his 2000 taxation year.
[2] Basic Personal Credit - The Appellant says that the Basic Personal Credit is unreasonably low.
[3] The Appellant maintains that because the Basic Personal Credit is unreasonably low, individuals who receive low incomes are forced to pay income tax. The Appellant argues that the imposition of income tax on "low income" Canadians violates the individual's right of life, liberty and the security of the person that is protected by section 7 of the Charter of Rights and Freedoms (the "Charter").
[4] Discrimination on the Basis of Age, Marital Status and Against the Poor - The Appellant also argues that subsection 15(1) of the Charter is violated by the unreasonably low Basic Personal Credit on the basis of age and marital status.
[5] Tuition and Education Credit - The Appellant argues that his tuition and education credits for the 2000 taxation year should be higher. The Appellant maintains that if the Basic Personal Credit were at the proper level, he would have a higher carry forward amount covering tuition and education fees from previous years.
[6] Discrimination under Subsection 15(1) of the Charter - Age - The Appellant maintains that the tax rates as set out in section 117 of the Income Tax Act (the "Act") violate subsection 15(1) of the Charter on the basis of age. The Appellant argues that the debt incurred by the Government of Canada before he reached the age of majority should not be his responsibility. The Appellant maintains that the Federal Government is transferring obligations for the Federal debt onto younger Canadians while the benefits which gave rise to the debt went to older Canadians.
[7] Re: Marital Status - The Appellant maintains that because the Basic Personal Credit is unreasonably low the effective tax rate for single Canadians is higher than for married Canadians.
[8] Re: Non-Resident - The Appellant also maintains that the different tax treatment of non-residents in the Act as compared to the tax treatment of residents of Canada is a violation of subsection 15(1) of the Charter.
[9] Counsel for the Respondent filed a Notice of Motion dated November 4, 2003. The Notice of Motion reads as follows:
1. The Notice of Appeal or parts of the Notice of Appeal are scandalous frivolous or vexatious or an abuse of the process of the Court, as set out in Rule 53 (b) and (c) of the General Procedure Rules.
2. The Notice of Appeal discloses no reasonable cause of action, as set out in Rule 58(1)(b) of the General Procedure Rules;
3. The Tax Court of Canada does not have the jurisdiction to grant the relief sought by the Appellant;
4. Rule 12 of the General Procedure Rules;
5. Section 12 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2 as amended and s. 171(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) and
6. Such further and other grounds as counsel may advise and the Honourable Court may permit.
[10] Sections 53 and 58 of the Tax Court of Canada Rules (General Procedure) read as follows:
53. The Court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document
(a) may prejudice or delay the fair hearing of the action,
(b) is scandalous, frivolous or vexatious, or
(c) is an abuse of the process of the Court.
58. (1) A party may apply to the Court,
(a) for the determination, before hearing, of a question of law raised by a pleading in a proceeding where the determination of the question may dispose of all or part of the proceeding, substantially shorten the hearing or result in a substantial saving of costs, or
(b) to strike out a pleading because it discloses no reasonable grounds for appeal or for opposing the appeal,
. . .
B. ISSUE:
[11] Should the Respondent's Notice of Motion be granted?
C. ANALYSIS:
Re: Basic Personal Credit
[12] The Appellant's argument is premised on the belief that the Basic Personal Credit in the year 2000 should be in the amount of $10,920.00. The Appellant arrived at this number by using the minimum wage levels in the Provinces of Ontario and Québec and applying the minimum wage to a 40-hour workweek.
In my opinion the Appellant's argument on this point is unacceptable because there is no valid reason to determine the Basic Personal Credit based upon minimum wage laws. It should be noted that the Basic Personal Credit is determined by the Federal Government and the minimum wage laws of a province are determined by the Provincial Legislature. The Appellant's determination of what the Basic Personal Credit should be is based upon dubious or incorrect reasoning in order to justify "subjective notions" as to when individuals should commence to pay income tax. This argument is not sufficient to invoke section 7 of the Charter.
[13] With respect to a claim that section 7 of the Charter should apply I wish to note that in R. v. Edwards [1996] 1 S.C.R. 128, the Supreme Court of Canada ruled that the rights protected by the Charter are personal rights that protect people. The Supreme Court said that a person who wants to challenge a law under section 7 of the Charter must show that his personal rights to life, liberty and security of the person have been violated. A person does not have standing to apply for a Charter remedy in relation to a breach of someone else's rights.
[14] Subsection 15(1) of the Charter - The Appellant also argues that subsection 15(1) of the Charter is violated on the basis of age, marital status and income level because of the unreasonably low Basic Personal Credit.
[15] The Appellant maintains that young people have lower incomes and higher expenses. The Appellant also argues that two people can live cheaper than one. In my opinion these arguments are unfounded and cannot be accepted.
[16] Finally, the Appellant argues that poor people pay higher effective tax rate. I am not prepared to recognize that the impact of the tax rate on lower income Canadians represents a violation of subsection 15(1) of the Charter.
[17] Tuition and Education Credit - The Appellant maintains that since the Basic Personal Credit is unreasonably low, his Tuition and Education Credit from previous years was eliminated and therefore he was unable to carry the Tuition and Education Credit forward to future years.
For the reasons mentioned above the Appellant's argument re the level of the Basic Personal Credit is unfounded and therefore the Appellant's argument on this issue must fail.
[18] Subsection 15(1) of the Charter - The Appellant also maintains that the debt incurred by the Government of Canada before he reached the age of majority should not be his responsibility. The Appellant maintains that this is a violation of his rights under the Charter on the basis of age.
[19] In my opinion this argument is without merit. With respect to the repayment of debt by the Federal Government no taxpayer (young or old) is discriminated against since the debt is the responsibility of all Canadians. I also believe that it is incorrect for the Appellant to suggest that the young did not benefit from the debt since much of the debt was accumulated in order to build a significant infrastructure which benefits all Canadians.
[20] The Appellant maintains that the different tax treatment in the Act of non-residents represents discrimination that would violate subsection 15(1) of the Charter.
[21] It is correct to say that there are certain provisions in the Act which impose tax on non-residents of Canada in a manner different from residents of Canada. However, I do not believe that the provisions in the Act that apply to non-residents would amount to a violation that would come within subsection 15(1) of the Charter. It should also be noted that in many situations non-residents of Canada are subject to tax by the country where they reside.
[22] As noted above the Appellant has maintained that portions of the Income Tax Act are in violation of the Charter. In Clow v. Canada, 92 DTC 6155, Associate Chief Justice Jerome said at page 6158:
Taxing statutes affect economic rights and the courts have clearly rejected the proposition that a right to life, liberty or security of the person includes economic remedies.
[23] For the reasons outlined above I have concluded that the Notice of Appeal is frivolous or vexatious and an abuse of the process of the Court as set out in Rules 53(b) and (c) of the General Procedure Rules in the Tax Court of Canada Act.
[24] The Respondent's Notice of Motion is granted with costs and the Notice of Appeal filed under the Act is struck out.
[25] The Appellant filed an appeal under the Canada Pension Plan (the "CPP"). The Appellant maintains that the CPP contribution rates set out in section 11.1 of the CPP discriminate on the basis of age contrary to subsection 15(1) of the Charter.
[26] The Appellant requests:
- a refund of all CPP contributions collected (both the employee portion and those collected via less employers) during 2001 ($2,566.00);
- his 2001 contributions payable be reduced to $nil;
- a declaration that the CPP contribution rates set out in section 11.1 of the CPP discriminate on the basis of age contrary to subsection 15(1) of the Charter and therefore section 11.1 is of no force and effect pursuant to section 52 of the Constitution Act, 1982 and/or section 24 of the Charter;
- in the alternative, the Appellant requests that the Court reduce the assessment of his 2001 CPP contributions payable to an amount that ensures the total amount of CPP contributions levied on the Appellant and other members of his age group (both directly and via their employees) over their lifetimes matches the total CPP benefits the Appellant and his age group can expect to receive over their lifetimes. In other words, adjust the combined employer/employee CPP contribution rate from 9.9% to 5.79% thereby eliminating any intergenerational wealth transfers (see page 192 of the 17th Actuarial Report on the Canada Pension Plan);
- punitive damages of $12,000,000 pursuant to section 24 of the Charter;
- interest;
- costs;
- such other remedies as are just and appropriate in the circumstances.
[27] The Notice of Motion filed in the CPP appeal reads:
THE MOTION IS FOR:
1. an Order striking the Notice of Appeal; in the alternative for
2. an Order striking paragraphs 1 to 7 of the Notice of Appeal or any combination thereof;
3. costs; and
4. such further and other relief that this Honourable Court deems just.
THE GROUNDS FOR THE MOTION ARE:
1. the Notice of Appeal or parts of the Notice of Appeal are scandalous, frivolous or vexatious or an abuse of the process of the Court, as set out in Rule 53(b) and (c) of the General Procedure Rules;
2. the Notice of Appeal discloses no reasonable cause of action, as set out in Rule 58(1)(b) of the General Procedure Rules;
3. the Tax Court of Canada does not have the jurisdiction to grant the relief sought by the Appellant;
4. rule 12 of the General Procedure Rules;
5. section 12 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, as amended and s. 171(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.); and
6. such further and other grounds as counsel may advise and this Honourable Court may permit.
[28] The Tax Court of Canada has the authority to hear appeals from determinations or assessments issued under the CPP. However, there are limitations to the type of relief that this Court can give in such appeals. The relief claimed by the Appellant under the CPP is not the type of relief that this Court can provide.
[29] The Appellant's appeal under the CPP should be quashed with costs to the Respondent.
[30] The Appellant also filed an appeal under the Employment Insurance Act (the "EI Act"). The Appellant maintains that the EI Act discriminates on the basis of age contrary to subsection 15(1) of the Charter,
[31] The Appellant requests:
(a) a refund of all EI premiums collected (both the employee portion and those collected via his employers) during 2001 ($1,684.63) pursuant to subsection 103(3) of the Employment Insurance Act;
(b) his 2001 EI premiums payable be reduced to $nil;
(c) a declaration that the EI premium rates set out in section 66 of the EI Act discriminate on the basis of age contrary to subsection 15(1) of the Charter and therefore section 66 is of no force and effect pursuant to section 52 of the Constitution Act, 1982 and/or section 24 of the Charter;
(d) in the alternative, the Appellant requests the Court reduce the assessment of his 2001 EI premiums payable to an amount that ensures the total amount of EI premiums levied on the Appellant is consistent with the amount authorized by section 66 of the Employment Insurance Act;
e. punitive damages of $12,000,000 pursuant to section 24 of the Charter;
f. interest;
g. costs;
h. such other remedies as are just and appropriate in the circumstances.
[32] The Notice of Motion filed in the EI appeal reads:
THE MOTION IS FOR:
1. an Order striking the Notice of Appeal; in the alternative for
2. an Order striking paragraphs 1 to 14 of the Notice of Appeal or any combination thereof;
3. costs; and
4. such further and other relief that this Honourable Court deems just.
THE GROUNDS FOR THE MOTION ARE:
1. the Notice of Appeal or parts of the Notice of Appeal are scandalous, frivolous or vexatious or an abuse of the process of the Court, as set out in Rule 53(b) and (c) of the General Procedure Rules;
2. the Notice of Appeal discloses no reasonable cause of action, as set out in Rule 58(1)(b) of the General Procedure Rules;
3. the Tax Court of Canada does not have the jurisdiction to grant the relief sought by the Appellant;
4. rule 12 of the General Procedure Rules;
5. section 12 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, as amended and s. 171(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.); and
6. such further and other grounds as counsel may advise and this Honourable Court may permit.
[33] The Tax Court of Canada has the authority to hear appeals from determinations or assessments issued under the EI Act. The relief claimed by the Appellant under the EI Act is not the type of relief that this Court can provide.
[34] The Appellant's appeal under the EI Act should be quashed with costs to the Respondent.
[35] Before concluding my comments I wish to refer with approval to the decision of Associate Chief Justice Bowman in the first Notice of Appeal filed by Mr. Davitt. At paragraphs 24 to 37 of Davitt v. The Queen, 2001 DTC 702, Bowman, A.C.J. said:
[24] This court is not empowered to do any of the things asked for. Our function is to hear appeals from assessments made under certain federal statutes. Generally, we can allow or dismiss appeals, and vacate or vary assessments or refer the matter back to the Minister of National Revenue for reconsideration and reassessment. Like all courts this court has certain powers under the Canadian Charter of Rights and Freedoms where a person's rights and freedoms under the Charter have been infringed but those powers must be exercised within the jurisdiction that Parliament has conferred on the court, as for example in O'Neill Motors Limited v. The Queen, 96 DTC 1486 aff'd 98 DTC 6424 (F.C.A.).
[25] What the appellant seeks here is not within those powers or that jurisdiction. The amendment of an act of Parliament is within the competence of the legislative, not the judicial, branch of government.
[26] Paragraphs 73 to 113 are struck.
[27] Paragraphs 114 to 134 deal with the Canada Pension Plan ("CPP"). The argument is that the CPP discriminates on the basis of age, sex and marital status contrary to subsection 15(1) of the Charter. The basis of this contention is set out in paragraphs 124, 127 and 129, which read:
124. Subsections 11.1(1) of the CPP Act operate to discriminate against younger Canadians by requiring younger Canadians to make contributions to the CPP at substantial higher rates than older Canadians even though younger Canadians are not entitled to receive higher CPP benefits.
127. The taxpayer submits that section 11.1 of the CPP Act discriminates on the basis of sex contrary to subsection 15(1) of the Charter as the CPP Act requires Canadian men to contribute to the CPP at the same rates as Canadian women, even though Canadian men, because of a shorter life expectancy, will receive benefits for a period that is substantially shorter than that for Canadian women.
129. Canadians who are single are required to contribute to the CPP at the same rates as married Canadians even though Canadians who are married receive more CPP benefits; spouses of deceased CPP contributors they are entitled to survivor's benefits.
[28] He asks for the following relief:
133. - the court declare that sections 11.1 of the Canada Pension Plan Act are contrary to section 15 of the Charter insofar as they require young, single men to make CPP contributions that are not proportional to the CPP benefits this group can expect to receive during their lifetimes.
134. - the court amend section 11.1 of the CPP Act so the CPP contributions of young, single men are proportional to the CPP benefits this group can expect to receive during their lifetime.
[29] There are procedures for appealing to this court from determinations or assessments under the CPP. They have not been followed. There are limitations to the type of relief that this court can give in such appeals. The relief sought here is not the type of relief that this court can give. Moreover, the amendment of legislation is not something that is available as a remedy that courts can give under the Charter.
[30] Paragraphs 114 to 134 are struck.
[31] Paragraphs 135 to 160 deal with Employment Insurance premiums. The essence of the argument put forward in these paragraphs is set out in paragraphs 144 and 145 which read:
144. The taxpayer submits that the Employment Insurance Act (hereinafter "EI Act") discriminates on the basis of age contrary to s. 15 of the Charter as it requires the taxpayer to pay premiums even though, as a full-time university student, he is ineligible to collect Employment Insurance benefits.
145. The taxpayer submits that the EI Act discriminates on the basis of age contrary to s. 15 of the Charter as surplus EI contributions are a 'tax' that is primarily targeted at younger Canadians.
[32] The relief sought is the following:
155. - provisions of the EI Act be declared contrary to section 15 of the Charter insofar as it requires young Canadians who are full-time university students to contribute to the EI plan at standard rates but disqualifies them from receiving the associated benefits;
156. - the EI Act be declared contrary to section 15 of the Charter insofar as the EI premiums collected are excessive and are being used to fund other Government of Canada programs.
157. - section 5(2) of the EI Act be amended so that the class of 'excluded employment', as that term is used in the Act, be expanded to include the employment earnings of full-time students; and
158. - the EI Act be amended so the EI contributions do not exceed the amount required to provide EI benefits and are not used to fund other government programs;
159. - the taxpayer receive a full refund of the Employment Insurance premiums paid by him and the related employer EI contributions, totalling $1,200;
160. - the court order such other remedies as the court considers appropriate and just in the circumstances.
[33] The relief sought is not relief that this court is empowered to give. This court is not able to amend legislation. Moreover, the arguments under section 15 of the Charter have no hope of success. They are wholly without merit.
[34] Paragraphs 135 to 160 are struck.
[35] Paragraphs 161 to 171 argue essentially that certain provisions of Part I.2 of the Income Tax Act which "claw-back" Old Age Security benefits in accordance with a formula one component of which is $53,215 discriminate against younger Canadians on the basis of age because the partial indexing of the amount of $53,215 under subsection 117.1(1) of the Income Tax Act erodes the Old Age Security benefits paid to Canadians.
[36] The relief sought is the following:
169. - Part I.2 of the ITA as it was in 1998 be declared contrary to section 15(1) of the Charter insofar as the income threshold under Part I.2 of $53,215 was only partially indexed thereby operated to erode the taxpayer's after-tax Old Age Security benefits;
170. - the ITA be amended so the income taxes levied on younger Canadians are proportional to the government benefits their generation will receive over their lifetime.
[37] There is no more merit in the positions advanced with respect to the so-called "claw-back" of Old Age Security benefits than there was with respect to employment insurance and the CPP. Section 15 of the Charter cannot be invoked every time someone dislikes a provision of the Income Tax Act. The fact that social benefits are unequally distributed does not of itself justify a remedy under the Charter. The amendment of fiscal or any other legislation to correct some perceived or imagined inequity is not something that the Charter empowers the court to do. Indeed the arguments here are even more devoid of merit than with respect to the Employment Insurance Act and the CPP. The appellant is not of an age where he might receive Old Age Security benefits. The fact that they might be "clawed-back" some thirty years hence (assuming the legislation remains unchanged - a rather fanciful conjecture) is no basis upon which any action of this court could be based. This is clear from the judgment of Dickson J. in Operation Dismantle (supra) at pages 456-457.
...
[53] I am in any event not striking out this appeal on procedural grounds. I am striking it out because it is frivolous, vexatious and scandalous and discloses no reasonable cause of action. I have not for some time seen such an array of singularly unmeritorious propositions. There can be no objection to law students debating imaginative and indeed far-fetched notions in a college common room. It is no doubt a salutary and necessary part of their education. It is however a waste of public funds and of the court's time to advance such matters before the courts. (Underlining added)
[36] I also wish to refer to the comments made by my associate Justice C.H. McArthur on the Notice of Appeal filed by Mr. Davitt under the Canada Pension Plan. In Davitt v. M.N.R., file number 2003-283(CPP) Justice McArthur said in his Reasons for Judgment:
[14] The Appellant appears to have a fixation directed at the CPP and other Canadian tax-related legislation. The relief he seeks would probably cost the Treasury billions of dollars. This Court is not the forum for these colossal social upheavals. I believe that the Appellant can only find relief from the Federal Parliament.
[15] I urge the Appellant to cease arguing his social reforms before the Tax Court of Canada. His extraordinary efforts would be better spent in other directions. This Court's resources are better spent dealing with more worthy appeals. The motion is granted and the appeal is struck out in its entirety, with costs to the Respondent.
[37] I wish to repeat the comments of Associate Chief Judge Bowman:
It is however a waste of public funds and of the court's time to advance such matters before the courts.
Signed at Vancouver, British Columbia, this 9th day of February 2004.
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"L.M.Little" |
Little J.
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CITATION: |
2004TCC133 |
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COURT FILES NO.: |
2003-511(IT)G 2003-284(EI) 2003-283(CPP) |
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STYLE OF CAUSE: |
William Shawn Davitt and Her Majesty the Queen The Minister of National Revenue |
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PLACE OF HEARING: |
Toronto, Ontario |
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DATE OF HEARING: |
November 18 and 19, 2003 |
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REASONS FOR ORDER BY: |
The Honourable Justice L.M. Little |
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DATE OF ORDER: |
February 9, 2004 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Jocelyn Espejo Clarke |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |